Advice Please re Fixed Rate Bonds

Sherbertfizz

Asking for a friend (genuinely!) who has been through major illness, is now unable to work, and has just sold a small second property she had been renting out.  She now needs to invest the proceeds (£100k) to supplement her state retirement pension (only income).  Her high street bank FA has provided details of fixed rate bonds and ISAs offered in partnership with Hargreaves Landsdown, only open for existing bank customers, that look too good to be true.  The 1yr fixed at 6.45% and the 2yr at 6.02%, 1yr ISA at 5.85% and 2yr at 5.36%.

Has anybody else come across these and do you think they are legitimate, or do they have any potential pitfalls (other than no access for the term)?  Seems extraordinary to be offering 2%+ over most other fixed term bonds at the moment.

TIA

eskbanker

Sherbertfizz said:

Her high street bank FA has provided details of fixed rate bonds and ISAs offered in partnership with Hargreaves Landsdown, only open for existing bank customers, that look too good to be true.

Offered by who specifically?

Sherbertfizz

eskbanker said:

Sherbertfizz said:

Her high street bank FA has provided details of fixed rate bonds and ISAs offered in partnership with Hargreaves Landsdown, only open for existing bank customers, that look too good to be true.

Offered by who specifically?

I've asked for that information - she sent me a photo of the letter which only gave the detail outlined above.

clairec666

General advice is "if it sounds too good to be true, it probably is"

Notepad_Phil

Sherbertfizz said:

eskbanker said:

Sherbertfizz said:

Her high street bank FA has provided details of fixed rate bonds and ISAs offered in partnership with Hargreaves Landsdown, only open for existing bank customers, that look too good to be true.

Offered by who specifically?

I've asked for that information - she sent me a photo of the letter which only gave the detail outlined above.

Sounds dubious to me. How is she in contact with the FA? If she's actually walked down to the bank itself and seen the FA then that's one thing, but could she possibly have made contact over the internet via some advert she saw -  and is now actually in contact with some scammer who is showing her details of some investment type bond on the HL website rather than a savings account, though in either case if it is a scammer any money sent will just end up in the scammer's pocket.

See https://www.hl.co.uk/shares/shares-search-results/b/barclays-bank-plc-6.125-sub-notes-perp-gbp for how someone could try to show that Barclays Bank was offering a greate interest rate.

ColdIron

Sherbertfizz said:

eskbanker said:

Sherbertfizz said:

Her high street bank FA has provided details of fixed rate bonds and ISAs offered in partnership with Hargreaves Landsdown, only open for existing bank customers, that look too good to be true.

Offered by who specifically?

I've asked for that information - she sent me a photo of the letter which only gave the detail outlined above.

Sounds pretty professional

offered in partnership with Hargreaves Landsdown

Is the misspelling of Hargreaves Lansdown yours or from the photograph?

Albermarle

There is no savings provider I am aware offering such rates for a fixed term savings account, so clearly there is something not right as the OP has already worked out.
Plus normally advisors do not usually advise on savings accounts.

poseidon1

Sherbertfizz said:

Asking for a friend (genuinely!) who has been through major illness, is now unable to work, and has just sold a small second property she had been renting out.  She now needs to invest the proceeds (£100k) to supplement her state retirement pension (only income).  Her high street bank FA has provided details of fixed rate bonds and ISAs offered in partnership with Hargreaves Landsdown, only open for existing bank customers, that look too good to be true.  The 1yr fixed at 6.45% and the 2yr at 6.02%, 1yr ISA at 5.85% and 2yr at 5.36%.

Has anybody else come across these and do you think they are legitimate, or do they have any potential pitfalls (other than no access for the term)?  Seems extraordinary to be offering 2%+ over most other fixed term bonds at the moment.

TIA

Not difficult to do simple due diligence here.

Current max rates for 1 and 2 year fixe rate bonds via HL savings hub are 4.33% and 4.15% - see below

https://www.hl.co.uk/partners/search/active-savings-account?partners=1&theSource=PCHLC&Override=1&adg=G+HLAS+CB&gad_source=1&gad_campaignid=8256933297&gbraid=0AAAAADwZS0-GoTeZIB_oOR1EEsUXWkZrZ&gclid=Cj0KCQjw_L_FBhDmARIsAItqgt7opEs-wPBhM_CD6a9w4tr_GaPL0hkzaQIC2Bp5hQ2kysPoSazdHg4aAqyBEALw_wcB

If HL is of interest to your friend she can (safely) go to them direct.

The rates you quote sound nonsensical to me  for straight forward FSCS protected cash deposits/isas and highly suggest some form of scam in play. Curious as to whether this so called meeting with an FA actually took place within reputable bank premises.

Newbie_John

Based on the information provided I would avoid.

To get more than 5% you need to invest, and non of that can be guaranteed in such short period 1,2 years.

Eyeful

1. The Best Low Risk Savings and Fixed Bond Accounts protected by the FSCS up to £85k are much lower than the values you have quoted.

2. Look at the best rates here and you will see , what I mean:
https://moneyfactscompare.co.uk/savings-accounts/
https://www.thisismoney.co.uk/money/article-1621507/Best-savings-rates-Fixed-rate-accounts.html

3. Something here does not make sense. No one is going to offer Safe Low Risk Fixed Bonds protected by the FSCS today at the rates you have quoted!

4. Did she actually meet this FA in the bank & speak to them there or was this online?

5.  I hope your friend was not attracted to these accounts via social media, or find this FA via social media.

Remember: If it sounds too good to be true, its because you do not know about the risks involved.

InvesterJones

Exactly as Notepad_Phil suggests, sounds more like corporate bonds than fixed rate cash bonds. E.g. https://www.hl.co.uk/shares/shares-search-results/b/barclays-bank-plc-5.75-sub-notes-2026

In which case the return is not what has been listed, and it's a whole different level of risk compared to cash fixed rate bonds/ISAs. So someone pretending otherwise is very suspicious.